This document discusses SANRAL's high costs for road construction projects in South Africa, specifically the Gauteng Freeway Improvement Project (GFIP). It analyzes the costs for each work package of the GFIP and finds that SANRAL overpaid by as much as R10 billion total. Work Package G is used as a case study, and OUTA's calculations based on the tender documents show this package was overpriced by 13.7%, or R95.9 million. The document raises concerns about lack of transparency and accountability in SANRAL's project costs.

1. “THE ROAD TO EXCESS”
SANRAL’S HIGH COST OF ROAD CONSTRUCTION IN SOUTH AFRICA
& THE OVERPAYMENT OF ALMOST R10BN ON GAUTENG’S FREEWAY UPGRADE

2. WHO IS OUTA?
OUTA is a proudly South African non-profit Civil Action Organisation,
comprising of and supported by people who are passionate about
improving the prosperity of our nation.
The conduct of excessive costs related to state controlled capital
expenditure projects is a grave problem in South Africa.
Our nation has become poorer as a result of this growing problem.
OUTA’s mandate is to expose and challenge the abuse of
authority, be it through maladministration and / or corruption.

3. GAUTENG’S GROWING CONGESTION
• Gauteng commuting has been problematic.
• Apartheid developmental policies of segregation pushed the
poor far from places of work.
• Public transport infrastructure insufficient to cope.
• Roads Transport (Mini-Bus Taxi’s and Cars) have become the
main method of commuting.
• Gauteng residents have become captive to the freeway
network.
• Congestion buildup required relief from early 2000’s.

4. TAKING ACTION TO REDUCE CONGESTION
• Gautrain – an alternative to road transport:
– Construction started 2006. First link Opened 2010
– Relatively narrow corridor – N to S (Tshwane to Joburg)
– Costs: In 2000 = R4bn; 2003 = R7bn; 2005 = R20bn; 2010 = 26bn
• Gauteng Freeway Improvement Project (GFIP)
– 2008 to 2011
– Cost of road: 2005 = R4,6bn (350km), 2012 = R17,9bn (201 km)
– Subjected to e-Toll finance mechanism / public participation?

5. THE COST OF E-TOLLS
• ETC – Contract awarded in excess of R8bn over 5 years.
• Bonds raised to cover GFIP < R20,6bn.
– R17,9bn for road upgrade.
– R2,7bn for e-Toll infrastructure and other.
• E-Toll decision backlash: less than 20% compliance today.
• However, the costs of the GFIP project at R17,9bn for
between 185 and 201km (+ R92 million / km) been
relatively unchallenged.

6. OUTA RAISES CONCERNS AT GFIP COST
FEB 2016 BENCHMARKING STUDY
• In Feb 2016, OUTA releases position paper:
– Society’s Odious GFIP Debt, courtesy of SANRAL.
• Benchmarks international costs of road construction case
studies to the cost of GFIP:
– Claims that rest of world builds 2-3 roads for each 1 of SANRAL’s.
– Provides rough estimate that SANRAL has grossly overpaid for
GFIP by as much as R10bn.
• SANRAL’s retort was to dismiss OUTA’s study.

7. SANRAL’S RETORT – APRIL 2016
• 23 March 2016: 28 Page letter from Werksmans > OUTA claims and
inferences were actionable. Demanded answers to 420 questions.
• OUTA indicated interest in responding directly with SANRAL.
• In April 2016, SANRAL’s press conference denounced OUTA’s
benchmarking exercise.
• They cited an “incorrect” reference to the “Delft Impact Study” and implied
that OUTA got its “billions mixed up with millions”.
• Their claim was wrong & OUTA’s reference was in fact correct.
• What SANRAL did not do, was to make a strong an resounding claim that
R17,9bn was fair value for the GFIP.
• SANRAL’s reaction set OUTA off on a project to determine the actual extent
of the excess involved in GFIP construction cost.

8. OUTA’S UPDATED POSITION PAPER

9. OUTA’S RESEARCH
• The past year saw OUTA’s team gather additional information
on the GFIP project.
– Tender documents of Work Package G – a good
benchmark.
– Numerous presentations (SANRAL & Construction
Companies) with significant information on the projects.
– Engagement and input from highly experienced civil
engineers and Quantity Surveyor.
– More international and local case studies for improved
benchmarking > more confirmation of inflated GFIP cost.

10. OVERVIEW
• Inconsistencies in SANRAL’s reporting on GFIP cost & Length
Distance and cost of GFIP as reported by SANRAL over time
Source Date Distance Cost
SANRAL’s Declaration of Intent (2005 – 2008) 2005 340km R4.6 billion
GFIP: Road Design Alternatives and Material
Consumption Estimates
2008 180km Unknown
Gauteng Freeway Improvement Project: Update on Phase
1 Construction
2009 185km R14,9 billion
Gauteng Freeway Improvement Project GFIP: Current and
Future Phases
2011 201km Unknown
SANRAL Construction Costs 2011 201km R17,9 billion
Nazir Alli presentation: Bidding Procedures, Monitoring
and Management of Public Works in Transportation
2012 184km R11,4 billion

11. ...FINDINGS AND ANALYSIS
Work
Package
Project Description
(Including Road, Structure works, Lighting & markings)
Distance
(km)
Amount
(excl vat)
Contract Price
Adjustment
VAT Total Actual Cost
A1 & A2
N1 - 20 (From Golden Highway to 14th Ave)
N12 - 18 (From Uncle Charlies - Diepkloof)
18 1,117,094,584 122,880,404 173,596,498 1,413,571,487
B N1 - 20 (From 14th Avenue - Buccleuch) 21 1,675,916,119 239,656,005 268,180,097 2,183,752,221
C N1 - 20&21 (From Buccleuch - Brakfontein) 23 1,492,478,366 213,424,406 238,826,388 1,944,729,160
D1 N1 - 21 (From Brakfontein - Flying Saucer) 10 1,046,331,801 149,625,448 167,434,015 1,363,391,263
D2 N1 - 21 (Atterbury - Scientia) 5 596,218,965 85,259,312 95,406,959 776,885,235
D3 N1 - 21 (Flying Saucer - Atterbury) 6 263,008,100 27,000,000 40,601,134 330,609,234
E1 N3 - 12 (Heidelberg - Geldenhuys) 12
E2 N12 - 18 (From Reading - Elands) 4
E3 N12 - 18 (Uncle Charlies - Reading) 12 527,526,704 52,752,671 81,239,112 661,518,487
F N3 - 12 (Geldenhuys - Buccleuch) 18 1,149,695,508 164,406,458 183,974,275 1,498,076,241
G R21 - 2 (Olifantsfontein - Hans Strydom) 17.6 631,000,000 69,410,000 98,057,400 798,467,400
H R21 - 1 (Benoni - Olifantsfontein) 12 535,427,551 58,897,031 83,205,441 677,530,023
I N12 - 19 (Gillooly's - Rietfontein) 10 1,102,283,849 125,000,000 171,819,739 1,399,103,587
J R21 - 1 (Rietfontein - Pomona) 5 348,002,527 34,800,000 53,592,354 436,394,880
K N12 - 19 (Rietfontein - Tom Jones) 9.5 701,669,523 55,000,000 105,933,733 862,603,256
? Tom Jones - Putfontein (distance est.) 6 511,657,325 49,483,720 78,559,746 639,700,791
? Pomona to Benoni (distance est.) 4 76,616,543 3,830,827 11,262,632 91,710,002
193 13,598,643,010 1,752,339,346 2,149,137,530 17,500,119,886
Precast Concrete Barriers (Tender 1) 230,076,364 13,804,582 34,143,332 278,024,278
Precast Concrete Barriers (Tender 2) 86,165,638 6,592,194 12,986,096 105,743,928
193 13,914,885,011 1,772,736,122 2,196,266,959 17,883,888,092
SANRAL's COST BREAKDOWN PER PROJECT
297,448,005 2,422,076,616
TOTAL without Barriers (17 Projects)
TOTAL with Barriers (19 Projects)
127
1,823,715,546 300,913,065
Median
Barriers

12. Johannesburg
Boksburg
Kempton
Park
Tembisa
Midrand
Olifantsfontein
Pretoria
Centurion
Sandton
Randburg
Roodepoort
Soweto
Alberton
Brakpan
Lanseria
M5
42
40
Watermeyer
Hans Strydom
Irene
Brakfontein
Heuweloord
Samrand
Hans Strijdom
Scientia
John Vorster
Clubview
Trichard St
Eufees rd
Rigel
Flying Saucer
Atterbury
Lynnwood
Simon Vermooten
Diepsloot
Nellmapius
Rossouw
Rooihuiskraal
Olifantsfontein
New Road
Bapsfontein
Birchleigh
Buccleuch
Allandale
Malibongwe Dr
William Nicol
Rivonia
Woodmead
Marlboro
Beyers Naude
14th Ave
Gordon Rd
Maraisburg
Marlboro
Grayston Dr
Corlett Dr
Athol Oaklands
Glenhove Rd
0
11th Ave
Houghton Dr
Oxford Rd
Empire Rd
Smit Str
Crown
Westgate
Village Rd
Rissik St
Heidelberg Rd
Heidelberg Rd
Maritzburg
Ruven Rd
Chilvers St
Cleveland Rd
Geldenhuys
Gillooly's
Van Buuren Rd
Eastgate
Linksfield Rd
Modderfontein Rd
Edenvale
London Rd
PWV3
Edenvale
Van Riebeeck Ave
Barbara Rd
Voortrekker Rd
Pomona
Atlas Rd
Kraft Rd Jet Park Rd
Rondebult Rd
Atlas Rd
R21
PWV15
Diepkloof Uncle Charlies
Columbine
Xavier St
Xavier
Booysens Rd
Vickers Rd City Deep
Rand Airport
Elands
Voortrekker Rd
Reading
Comaro Str
Klipriver
Grey Ave
Wits Rifles Rd
Osborn Rd
Mapleton R21
Golden Highway R533
Griffiths Rd
Golden Highway
Kliprivier Dr
R59
Michelle Ave
Swartkoppies Rd
Leondale
Barry Marais Rd
Grasmere
Eldorado Park
Lenasia
Dalpark
Denne Rd Ergo Rd
Tonk Meter Rd
PWV15
Tom Jones
Snake Rd
Putfontein Daveyton
Garsfontein (new)
Germiston
Olifantsfontein
Soweto
N17 / N1
N1
N17
N4
N17
N17
N4
N1
N3
R21
N1
N4
0 10 20 30 405
Kilometers I
O.R Tambo
International
Airport
W
orkPacka
ge B
WorkPackageC
WorkPackageG
WorkPackageH
Work Package
D1
Work
Package
D3
Work
Package
D2
Work
PackageJ
Work Package I
Work Pakage K
Work
PackageF
Work
Package E2
Work
Pack
ageE1
Work Pakage E3
W
orkPackageA1
GFIP OVERVIEW
• The GFIP – A mul. package project.
• 2008 to 2011/12.
• Major construc.on companies &
some smaller en..es plus JVs.
• Roughly 27% increase in surface area.
• Thus 73% rehabilita.on of exis.ng
road surface area.
• Some packages had more structural
(bridge) work than others.
• Some packages had more interchange
work than others.

13. OUTA’S ANALYSIS: PACKAGE G “BASE CASE”
• Work Package “G” – R21 Olifantsfontein to Solomon Mahlangu
– (Solomon Mahlangu Interchange previously Hans Strydom) .
• OUTA obtained the full tender documents.
• 17,6 km long: 2-lanes upgraded to 4-lanes (each way).
• Had highest ratio of new lane construction (38%) to re-habilitation
(62%). Why not 50:50? Lanes not as wide... etc.
• Little structural work in this package.
• New lane construction is much more expensive than rehabilitation.
Thus package “G” and “H” had higher road work elements than others.

14. OUTA's WORK PACKAGE "G" COST CALCULATION (ZAR)
SCHEDULE Package G
TOTAL SCHEDULE B: Structures 16,508,420
TOTAL SCHEDULE D: Govt requirements for BBBEE 1,040,000
TOTAL SCHEDULE E: Electrical 37,520,883
TOTAL SCHEDULE F: Ultra thin friction course 45,260,000
TOTAL SCHEDULE H: Alternative Road works 486,354,997
TOTAL SCHEDULES 586,684,300
Contract Price Adjustment 29,598,222
TOTAL (Excluding VAT) 616,282,522
ADD 14% VAT 86,279,553
TOTAL WORKPACKAGE COST 702,562,075
Length of the Work Package (km) 17.6
Ave. Cost / km (Including Lighting) 39,918,300
SANRAL's PAID TENDER 798,467,400
SANRAL's Cost per KM for Work Package 45,367,466
COST VARIANCE: Overpriced / (Underpriced) 95,905,325
PERCENTAGE VARIANCE 13.7%
Package “G” Overview
• Applying Quan..es and indices as
per tender docs & material / input
costs.
• Tenders asked for cos.ng within &
without more expensive UTCRCP
(Ultra Thin Con.nuously Reinforced Concrete Paving ).
• The opinion without was used.
• Cost of Package G: R703 million
• Ave R40 mil / kilometer.
• A good base for other packages,
excluding structural work.
• Lowest variance.

15. OUTA’S ANALYSIS – METHODOLOGY 1
39,918,300
Work
Package
Project Description
Distance
(km)
OUTA Indicative
Amount (Incl VAT)
SANRAL's Price
Paid (Incl VAT)
Value Variance
%
Variance
A
N1 - 20 (From Golden Highway to 14th Ave)
N12 - 18 (From Uncle Charlies - Diepkloof)
18 718,529,400 1,413,571,487 695,042,087 97%
B N1 - 20 (From 14th Avenue - Buccleuch) 21 838,284,300 2,183,752,221 1,345,467,921 161%
C N1 - 20&21 (From Buccleuch - Brakfontein) 23 918,120,900 1,944,729,160 1,026,608,260 112%
D1 N1 - 21 (From Brakfontein - Flying Saucer) 10 399,183,000 1,363,391,263 964,208,263 242%
D2 N1 - 21 (Atterbury - Scientia) 5 199,591,500 776,885,235 577,293,735 289%
D3 N1 - 21 (Flying Saucer - Atterbury) 6 239,509,800 330,609,234 91,099,434 38%
E1 N3 - 12 (Heidelberg - Geldenhuys) 12 479,019,600
E2 N12 - 18 (From Reading - Elands) 4 159,673,200
E3 N12 - 18 (Uncle Charlies - Reading) 12 479,019,600 661,518,487 182,498,887 38%
F N3 - 12 (Geldenhuys - Buccleuch) 18 718,529,400 1,498,076,241 779,546,841 108%
G R21 - 2 (Olifantsfontein - Hans Strydom) 17.6 702,562,080 798,467,400 95,905,320 14%
H R21 - 1 (Benoni - Olifantsfontein) 12 479,019,600 677,530,023 198,510,423 41%
I N12 - 19 (Gillooly's - Rietfontein) 10 399,183,000 1,399,103,587 999,920,587 250%
J R21 - 1 (Rietfontein - Pomona) 5 199,591,500 436,394,880 236,803,380 119%
K N12 - 19 (Rietfontein - Tom Jones) 9.5 379,223,850 862,603,256 483,379,406 127%
? Tom Jones - Putfontein 6 239,509,800 639,700,791 400,190,991 167%
? Pomona to Benoni 4 159,673,200 91,710,002 - 67,963,198 -43%
193 7,708,223,730 17,500,119,886 9,791,896,156 127%
Precast Concrete Barriers (Tender 1) 278,024,278 278,024,278 -
Precast Concrete Barriers (Tender 2) 105,743,928 105,743,928 -
8,091,991,936 17,883,888,092 9,791,896,156 121%
127
TOTAL with Barriers (19 Projects)
Median
Barriers
Using Work Package G as a "Base Case" / km cost for G:
METHODOLOGY 1
2,422,076,616 1,783,383,816 279%
TOTAL without median barriers (17 Projects)

16. OUTA Obtained a copy of
this presenta.on:
Louw Kannemeyer is a
Network Manager at
SANRAL
Presented around the .me
the GFIP tenders were
being finalised
Contained key quan..es
for some work packages

17. SLIDE 13: SANRAL’S KEY QUANTITIES
PACKAGES: A (1&2), B, C, D(1&2) E(1&2) F
D1 D2 C F A1-A2 B E1 E2
Brakfontein to
N1/R21 I/C
Atterbury to
Proefplaas
Buccleuch to
Brakfontein
Geldenhuis to
Buccleuch
14th Avenue
to Uncle
Charlies
14th Avenue
to Buccleuch
Old Barn to
Geldenhuis
Reading to
Elands I/C
Section 2200 Concrete 670.00 m3 195.00 m3 1930.00 m3 180.00 m3 312.00 m3 750.00 m3 336.00 m3 825.00 m3 5198.00 m3
Prefabricated Culverts Reinforcing 15.50 t 13.00 t 35.00 t 25.00 t 8.90 t 10.00 t 22.40 t 9.20 t 139.00 t
Section 2300 Concrete 2620.00 m3 2510.00 m3 280.00 m3 4495.00 m3 5785.00 m3 11740.00 m3 1540.00 m3 2125.00 m3 31095.00 m3
Open Drains Reinforcing 48.40 t 37.00 t 2.50 t 61.60 t 13.50 t 134.00 t 53.00 t 41.50 t 391.50 t
Section 4100 Prime Prime 160000.00 l 180000.00 l 424400.00 l 24360.00 l 241840.00 l 147000.00 l 77000.00 l 60000.00 l 1314600.00 l
Tack Coat 30%
Stable Grade
Emulsion
310000.00 l 93600.00 l 1150000.00 l 562342.00 l 424225.00 l 156000.00 l 840000.00 l 140000.00 l 3676167.00 l
Semi Gap 19mm
max AR1
6640.00 t 6640.00 t
Base 40/50 pen bit.
With 26.5mm
159450.00 t 11986.00 t 17320.50 t 64045.00 t 35200.00 t 4221.67 t 292223.17 t
Continuously
Graded
30950.00 t 12130.00 t 26488.00 t 9239.00 t 1180.00 t 44000.00 t 89000.00 t 2875.00 t 215862.00 t
Semi open grade
bitumen rubber
12510.00 t 79000.00 t 16700.00 t 108210.00 t
Concrete 20391.00 m3 9724.00 m3 32212.00 m3 12672.00 m3 5856.00 m3 26508.50 m3 15962.30 m3 16329.00 m3 139654.80 m3
Reinforcing 2876.50 t 1359.00 t 3874.00 t 1579.10 t 1568.10 t 4514.20 t 1792.35 t 2814.60 t 20377.85 t
Section 7100 Concrete 5750.00 m3 3075.00 m3 29036.00 m3 16978.00 m3 7623.00 m3 30362.00 m3 1138.00 m3 93962.00 m3
Concrete Pavement Reinforcing 400.00 t 270.00 t 1504.00 t 50055.00 t 22.10 t 550.00 t 254.00 t 53055.10 t
BRASO 20831.00 t 116920.00 t 36020.00 t 173771.00 t
UTFC 50000.00 m2 50000.00 m2
Structures
Section 4200
Asphalt
GAUTENG TOLL HIGHWAY PROJECTS Total
Total Concrete 269909.80 m3
Total Reinforcing 73963.45 t
Total Prime 1314600.00 l
Total Tack Coat 3676167.00 l
Total Asphalt 796706.17 t
Total UTFC 50000.00 m2

18. OUTA’S ANALYSIS – METHODOLOGY 2A
• OUTA’s road construction engineers and QS applied their analysis of this
information to:-
– these key quantities,
– length and width of road surface areas
– Understanding of higher extent of structural & bridgework on these
packages.
– Applied known costs of material applicable at the time.
– Adjusted for COLTO standards, P&Gs, Series 3000 (Earthworks) etc.
– Applied their extensive construction experience.
• Added insights of another presentation by KAS JV on Work Package E1.
• Excluded Work Package F – Steel to Concrete ratio questionable.

19. OUTA’S ANALYSIS – METHODOLOGY 2A
OUTA's Calculation of Methodolgy 2(a) for Cost of GFIP: Work Packages A, B, B, D(1&2), E(1&2) and G
SCHEDULE Package G Package A Package B Package C Package D1&2
Structures 16,508,420 49,428,973 189,003,552 202,648,672 146,498,436
Govt requirements for BBBEE 1,040,000 1,216,108 1,387,070 1,817,169 1,817,169
Electrical and lighting 37,520,883 23,356,721 27,249,508 29,844,699 19,463,934
BRASO/ UTFC/ Other layers 45,260,000 184,161,777 88,446,763 51,150,320 75,248,898
Road works 486,354,997 338,597,160 395,030,020 558,340,722 391,130,053
TOTAL SCHEDULES 586,684,300 596,760,739 701,116,912 843,801,582 634,158,490
Contract Price Adjustment 29,598,222.93 25,951,632.63 51,220,972.44 39,458,974.62 29,464,315.48
TOTAL with CPA 616,282,522.49 622,712,371.47 752,337,884.78 883,260,556.16 663,622,805.03
ADD 14% VAT 86,279,553 87,179,732 105,327,304 123,656,478 92,907,193
TOTAL WORKPACKAGE COST 702,562,076 709,892,103 857,665,189 1,006,917,034 756,529,998
Length of the Work Package (km) 18 18 21 23 15
Ave. Cost / km (Including Structures & Lighting) 39,918,300 39,438,450 40,841,199 43,779,001 50,435,333
SANRAL's PAID TENDER 798,467,400 1,413,571,487 2,183,752,221 1,944,729,160 2,140,276,499
SANRAL's Cost per KM for Work Package 45,367,466 78,531,749 103,988,201 84,553,442 142,685,100
COST VARIANCE: Overpriced / (Underpriced) 95,905,324 703,679,384 1,326,087,033 937,812,126 1,383,746,501
PERCENTAGE VARIANCE 14% 99% 155% 93% 183%
Package E1 + E2 Total
133,485,246 737,573,300
1,511,532 8,789,047
26,281,529 163,717,273
187,955,400 632,223,157
468,435,544 2,637,888,496
817,669,251 4,180,191,273
39,229,953.62 214,924,072
856,899,204.96 4,395,115,345
119,965,889 615,316,148
976,865,094 5,010,431,493
16 111
61,054,068 45,302,274 -
2,422,076,616 10,902,873,384
151,379,788 98,579,325 -
1,445,211,522 5,892,441,890
148% 118%
OVER PRICED

20. OUTA’S ANALYSIS – ROAD WORKS EST. ONLY• Road Works
estimate only
for Packages
A-E & G
• Cost / KM basis
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
1 2 3 4 5 6 7
Work Package Cost per KM for Road works *
RANDS
OUTA’s Es<mate Cost / KM
SANRAL Cost / KM **
* ROAD WORKS Costs are those a3ributed to all work, less structures, CPA and VAT
** Note: Sanral’s figures are their own, pre CPA and less OUTA’s esGmate of Structure costs. All excl. VAT
Work Packages > A B C D 1&2 AVE (A,B,C,D,E,G) G E 1&2
OUTA: R31,1 m
SANRAL: R86,6 m

21. OUTA’S ANALYSIS – METHODOLOGY 2B
More Accurate Approach
• Using 2(a) methodology for
111 km of packages with good
costing information.
• Combined with Package “G”
base case for remainder 82
km packages, and inflating
Structures costs.
OUTA's Calculation of Methodolgy 2(b): TOTAL Cost of GFIPOUTA's Calculation of Methodolgy 2(b): TOTAL Cost of GFIP
SCHEDULE
Structures
Govt requirements for BBBEE
Electrical and lighting
BRASO/ UTFC/ Other layers
Road works
TOTAL SCHEDULES
Contract Price Adjustment
TOTAL with CPA
ADD 14% VAT
WORKPACKAGE COST (Excl Barriers)
Median Barriers (as per Sanral Tender)
TOTAL COSTS (Inclu Median Barriers)
Length of the Work Package (km)
Ave. Cost / km (Including Structures & Lighting)
SANRAL's PAID TENDER (Excl Barriers)
Median Barriers (as per Sanral Tender)
SANRALS TOTAL GFIP COSTS (Incl Barriers)
SANRAL's Cost per KM for Work Package
COST VARIANCE: Overpriced / (Underpriced)
PERCENTAGE VARIANCE
* Package G costs adjusted to increase allowance for Structures and Road Works
OUTA's ESTIMATES
SANRAL's
COSTS
VARIANCE
Using Calculations for
Methodology 2(a)
Using Methodology 1
Work Packages A, B, C,
D(1&2), E(1&2), G
Ave G Costs* Applied to
Remainder Packages
GFIP TOTAL
737,573,300 277,289,421 1,014,862,721
8,789,047 4,869,091 13,658,138
163,717,273 175,665,950 339,383,223
632,223,157 211,899,091 844,122,248
2,637,888,496 2,077,025,668 4,714,914,164
4,180,191,273 2,746,749,221 6,926,940,494
214,924,072 138,573,498 353,497,570
4,395,115,345 2,885,322,719 7,280,438,064
615,316,148 403,945,181 1,019,261,329
5,010,431,493 3,289,267,900 8,299,699,393
383,768,206
8,683,467,599
111 82 193
45,302,274 39,918,300 44,992,060 -
10,902,873,384 6,597,246,503 17,500,119,886
383,768,206
17,883,888,092
98,579,325 80,063,671 92,662,633 -
5,892,441,890 3,307,978,603 9,200,420,494
118% 101% 106%
* Package G costs adjusted to increase allowance for Structures and Road Works
SANRAL PAID
OVER PRICED BY

22. OUTA’S ANALYSIS – METHODOLOGY 3
Square Meter Surface Calculations:
Rehab & New
• Using combination of satellite imagery,
tenders, & known information of road
widths, OUTA estimated surface area
of New and Existing Road Works.
• OUTA placed new road construction at
R1666 / m2
• Rehabilitation / resurfacing at average
of R325 / m2
• Then added earlier costing pertaining
to Lighting, Structures, CPA etc.
Methodology 3: Applying Cost / Sq M for Roadworks
AREA (Sq M) COST (ZAR) AREA (Sq M) COST (ZAR) AREA (Sq M) COST (ZAR)
New Road Surface Area 1,666R 1,182,720 1,970,411,520 761,223.84 1,268,198,919 1,943,944 3,238,610,439
Existing Road Surface Area 325R 3,193,440 1,037,868,000 2,055,366.16 667,994,002 5,248,806 1,705,862,002
TOTAL 4,376,160 3,008,279,520 2,816,590 1,936,192,921 7,192,750 4,944,472,441
Total per Sq M 687R
Lighting 163,717,273 175,665,950.24 339383223
Structures 737,573,300 277,289,421 1,014,862,721
TOTAL 3,909,570,093 2,389,148,292 6,298,718,385
Remaining 82 km of GFIP
AREA of A, B, C, D(1&2),
E(1&2), & GCost / Sq
M Applied
TOTAL GFIP
ITEMS COSTED
CSI & BBBEE 8,789,047 4,869,090.91 13,658,138.11
Contract Price Adj 214,924,072 138,573,498.26 353,497,569.98
Median Barriers 383,768,205.78
TOTAL 4,133,283,212 2,532,590,881 7,049,642,299
VAT (@ 14%) 578,659,650 354,562,723 986,949,922
TOTAL Including VAT 1,117R 4,711,942,862 - 2,887,153,605 8,036,592,221
SANRAL PAID > 17,880,000,000
SANRAL's COST / Sq M: 2,486R 2,485.84

23. SUMMARY OF OUTA’S ANALYSIS
3 METHODOLOGIES
VARIOUS ASSESSMENTS ALIGN
• Whichever way we look at it, we
come in at around R8,3bn.
• OUTA realises that SANRAL will
seek more flaws and errors to
denounce our findings, analysis
and claims.
• Which is why we now seek the
actual and full information – in
electronic format .
• Without excuses of secrecy due
to privileged information etc.
SUMMARY AND COMPARISONS OF OUTA's THREE CALCULATION METHODOLOGIES
METHOD COST OF GFIP METHOD DESCRIPTION
Method 1 8,091,991,936
Using Engineers calculation Package G tender documents as (base
case) per KM for all packages
Method 2(b) 8,683,467,599
Using Engineers calculation of Key Quantities obtained for Several
Work Packages (A, B, C, D, E, G) and applying Package G (base case
cost / KM) to remainder of packages (82km)
Method 3 8,036,592,221
Applying the figure of R325/m² for rehabilitation work(5,248,806
m2) and R1666/m² for added surface area (1,943,944 m2) and
adding costs pertaining to structures, lighting and median barriers.
AVERAGE 8,270,683,918 Taking an average of the above three methodologies
SANRAL 17,883,888,092 The actual figure paid by SANRAL for the GFIP
DIFFERENCE 9,613,204,174
% Variance 116%
The amount OUTA believe that SANRAL overpaid for the GFIP

24. OUTA's ASSESSMENT OF WORK PACKAGE "I"
SCHEDULE (Gillooly's to Rietfontein IC) Package I
SANRAL's Cost of Work Package I (before CPA & VAT) 1,102,283,849
Estimate Structure Costs by OUTA (Maximum) 150,000,000
OUTA's Est of SANRAL's Cost of Road works: (excluding
Structures, CPA, VAT)
952,283,849
Length of Package: 10
Roadwork cost per KM (Excluding VAT & CPA): 95,228,385
OUTA's Estimate of Road Work per KM:
(Adjusted for higher cost of Ultra Thin Continuously Concrete Technology applied)
32,500,000
Overpricing of Work Package I per KM: 62,728,385
% Variance: 193%
MORE ANOMOLIES: WORK PACKAGE “I”
WORK PACKAGE I
• A simple route: Gillooly’s to Rietfontein.
• 10 KM long with limited interchange work.
• Infrastructure work (Flyover and minimal
bridge work) estimated at R150m.
• SANRAL paid R1,4 bn for this package.
• Excluding CPA and VAT, and less Structures
estimate: SANRAL paid R952m.
• That is R95m / km for Road Work !!!!
• OUTA estimates 193% overpaid for road
works

25. CONTRACT PRICE ADJUSTMENT (CPA)
Contract Price Adjustments (CPA) on GFIP
• CPA a standard adjustment, based on escalation
indices provided by StatsSA monthly.
• Accounts for uncontrollable fluctuations (Fuel,
Steel, Bitumen etc) are credited (or debited)
• Naturally, the higher the price of project, the
higher the value of CPA.
• OUTA’s GFIP costs, applied to the actual CPA
indicies = R215 m due to CPA (limited packages)
• SANRAL’s high costs of GFIP and apparent
inflated CPA = 450% higher.
• OUTA estimates on total Package, SANRAL may
have overcompensated contractors by over R1bn.
Work Package SANRAL Paid OUTA Calculations % Variance
A 122,880,404 25,951,632 373%
B 239,656,005 51,220,972 368%
C 213,424,406 39,458,975 441%
D1
D2
E1
E2
G 69,410,000 29,598,222 135%
TOTAL 1,181,168,640 214,924,071 450%
Contract Price Adjustment on GFIP (limited packages)
300,913,065
29,464,316
39,229,954
697%
667%
234,884,760

26. BENCHMARKING IN AFRICA
ETHIOPIA: ADDIS ABABA to ADAMA Expressway
• Completed 2014.
• Greenfields project – 6 new lanes (3 each way).
• 84 KM plus 18km link roads, 7,2 km front roads.
• Area: 2,625,700 m2
• Rand Value: R4,1 billion (2008).
• Cost / km: R47,4 m
• Cost / m2: R1,541
• COMPARED TO GFIP: R2,486 / m2

27. BENCHMARKING IN USA
KATY Freeway – Houston Texas
• Completed 2006, Widening - 22 lanes
• Bridge structures upgraded, rail line relocated
• Cost / m2: R1,359. GFIP: R2,486

28. OTHER BENCHMARK PROJECTS
BENCHMARK EXERCISE TO COMPARE GFIP ON COST / KM or m2 BASIS
Benchmark Ref # 7: Project Name: Addis Ababa–Adama Expressway
Year KM m² Value ($) (2014) Value ($) (2008) Value (ZAR)** Cost ZAR/km
Cost
ZAR/m²
2014 84.7 2,625,700 700,000,000 493,472,378 4,046,473,500 47,774,185 1,541
Benchmark Ref #8: Project Name: Nairobi-Thika Superhighway Upgrade
Year KM m² Value ($) (2012) Value ($) (2008) Value (ZAR)** Cost ZAR/km
Cost
ZAR/m²
2012 50 1,700,000 360,000,000 285,153,719 2,338,260,496 46,765,210 1,375
Benchmark Ref # 9: Project Name: Tonota to Francistown
Year KM m² Value ($) (2014) Value ($) (2008) Value (ZAR)** Cost ZAR/km
Cost
ZAR/m²
2015 30 744,000 113,000,000 89,506,584 733,953,989 24,465,133 986
Benchmark Ref # 11: Project: The Katy Freeway (IH-10)
Year KM m² Value ($) (2006) Value ($) (2008) Value (ZAR)** Cost ZAR/km
Cost
ZAR/m²
2006 11.1 1,409,700 208,000,000 233,708,800 1,916,412,160 172,649,744 1,359
Benchmark Ref #12: Western Europe - Western China International Transit Corridor (CAREC - 1b)
Year KM m² Value ($) (2006) Value ($) (2008) Value (ZAR)** Cost ZAR/km
Cost
ZAR/m²
2012 305 8,387,500 1,256,000,000 994,869,641 8,157,931,056 26,747,315 973
Benchmark Ref #13: PATHE - Section Maliakos - Kleidi Motorway PPP, Greece
Year KM m² Value (€) (2012) Value (€) (2008) Value (ZAR)** Cost ZAR/km
2012 230 8,387,500 1,256,000,000 994,869,641 11,938,435,692 51,906,242
SANRAL's PRICE PAID FOR GFIP
Year KM m² Value (ZAR)** Cost ZAR/km
Cost
ZAR/m²
2008 193 7,192,750 17,880,000,000 92,642,487 2,486
** Deflated to 2008 Prices and R : $ Exchange rate at the time
BENCHMARKING
• Always best to compare by M2 – if
one can get the figure.
• Fine to do by KM if similar in width
• Try to compare similar type projects,
eg. upgrade, widening etc.
• Convert to KM, Rands and Inflation.
• OUTA Research: Generally, other
projects were more complex, had
more new road works.
• We maintain that benchmarking with
International projects (built to
COLTO, FIDIC and World Bank
standards) is an acceptable method
of comparison.
• How else does one tell if local
markets are being manipulated?

29. TOO MANY QUESTIONS
• SANRAL are the experts in this game – how did they allow
such high pricing to prevail?
• Why did SANRAL not act faster to claw back the overcharges?
• Why is construction industry being “protected”?
• Why did CIDB halt its in-depth investigations into the matter?
• Why have SAFCEC and SAICE not taken SANRAL and the
industry to task?

30. CONCLUSIONS
• The GFIP Price-tag of R17,9 bn is excessively overpriced.
• OUTA estimates value of between R8bn and R9bn (Less than ½ ).
• SANRAL has not been transparent and forthcoming with details
and full explanations of how it arrived at R17,9bn.
• Information is missing on internet, when compared to other info.
• Even if OUTA has missed the mark by as much as 20%, the
price-tag remains excessive.
• This issue will not abate until transparency and a full
independent enquiry is commissioned.

31. RECOMMENDATIONS
• OUTA will send letters to relevant Ministers for request to intervene.
• OUTA will request that if SANRAL management is implicated or did
not act in the best interests of the public:
– E-Tolls is scrapped forthwith.
– Corrective action is taken against ALL transgressors.
• The recent agreement between Government and Construction
Industry players be revisited - as “punishment” imposed is hardly
punitive.
• Civil claims are re-opened against construction industry for
collusion and adequate penalties are applied.

32. ...RECOMMENDATIONS
• That oversight & industry bodies explain why they have been silent
on this issue.
• That the N3 Cedara – Durban project (and others) tenders are fully
investigated: R15bn for a 78km upgrade project.
• That a Transport Regulator is introduced to monitor industry
matters (An agreement was reached with The Road Freight
Association that this would happen in 2012).
• That in conjunction with the introduction of a Transport Regulator,
Government appoints an oversight body (that includes input from
Civil Society) to monitor road construction pricing and tenders with
the state.

33. THANK YOU
• Questions ?